The Week Ahead for Mortgage Rates: December 19, 2011

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Just when you thought the economy could move forward, the politicians in Congress want to prolong the debate on extending tax cuts for the general public. If an agreement cannot be made by December 31st nearly 160 million Americans will see their payroll taxes increase by 48%. This ultimately means less take-home pay and slower economic growth in 2012.

Although 2012 is just a couple weeks away there are still plenty of key economic and financial reports to end 2011. This week has a load of housing data that includes November Housing Starts and Permits, November Existing and New Home Sales, and a couple of housing price index reports.

We will also get a final look at 3rd Quarter GDP, November Durable Goods Orders, November Personal Income and Spending and of course Weekly Jobless Claims. Claims declined 19,000 last week to 366,000. This week the early take is for an increase of 14,000.

Most of the key economic and financial reports this week is important, even the sales of homes although there is no reason to expect much improvement.

The Treasury will also auction $99 Billion of 2 year, 5 year and 7 year notes beginning Monday through Wednesday. Add in the holidays coming on and Europe’s continual fumbling, the markets may present volatility with many traders and investors closing down for the year.

Last week the 10 year note yield fell 25 basis points on continuing safe haven moves against Europe’s mess; mortgage rates are following but way behind, the move to lower interest rates is mostly confined to the Treasury markets.

Mortgage rates and mortgage bond prices are trading an even narrower range. The price on the 3.5 FNMA coupon has held in a 50 basis point price range now for almost a month. We remain skeptical that US interest rates will decline much from their present levels. The long-term outlook is that mortgage rates will begin to slowly increase from present levels.

The economic calendar this week has the following key economic and financial reports.

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval ! His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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[…] About the Author: James K Barath is a Certified Mortgage Planning Specialist, qualified liability advisor and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation’s PMA Science of Success Class. It’s your home and your future. It’s his profession and his passion. He is ready to work for your best interest. Contact James Barath today for your Borrow Smart Analysis – the CALM Approach to Borrowing ! His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!Source: welcomehomenwi.com […]